U.S. grains: Soybeans up on export demand

USDA data awaited

CBOT July 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures firmed on Monday, reaching a 3-1/2 week high on fresh export sales to top global buyer China, traders said.

Corn and wheat futures drifted lower as traders adjusted positions a day ahead of a monthly supply/demand report from the U.S. Department of Agriculture in which analysts expect the government to project ballooning U.S. corn inventories in the coming crop year.

Chicago Board of Trade July soybean futures settled up 4-1/2 cents at $8.55 per bushel, after reaching $8.61-1/4, the contract’s highest since April 15 (all figures US$).

CBOT July corn ended down 3/4 cent at $3.18-1/2 a bushel and July wheat fell 4-3/4 cents to settle at $5.17-1/4 a bushel.

Soybeans rose on optimism about fresh export demand. Chinese importers bought at least four cargoes, or about 240,000 tonnes, of U.S. soybeans, export traders said Monday.

More sales are possible as a Chinese state-owned firm had sought offers for up to 20 cargoes shipped from July to November from terminals along the U.S. Gulf Coast or the Pacific Northwest, the traders said.

The purchases are the latest in a recent string of buying by China, which vowed to increase U.S. agricultural imports dramatically as part of a Phase One trade deal Beijing signed with the United States in January.

“Soybeans and corn prices are supported by expectations of more Chinese buying after talks between Washington and Beijing,” said Ole Houe, director of advisory services at brokerage IKON Commodities.

Farmers were assessing whether a weekend frost in the northern and eastern Midwest affected newly planted corn and soybean crops and developing soft red winter wheat.

After the CBOT close, USDA in its weekly crop progress report rated 53 per cent of the U.S. winter wheat crop in good to excellent condition, a downgrade from 55 per cent the previous week.

Planting progress advanced, although not as much as most analysts expected. USDA said the U.S. corn crop was 67 per cent seeded by Sunday, well ahead of the five-year average of 56 per cent, but behind the average estimate in a Reuters analyst poll of 71 per cent. Soybean planting was 38 per cent complete, above the five-year average of 23 per cent but behind the average analyst estimate of 42 per cent.

Traders were looking ahead to Tuesday’s USDA supply/demand report for May, in which the government will release its first official forecasts for the 2020-21 marketing year, representing the crops currently being seeded.

Analysts surveyed by Reuters on average expect USDA to project U.S. corn stockpiles to reach nearly 3.4 billion bushels by the end of the 2020-21 marketing year, on Aug. 31, 2021, up from about 2.2 billion at the end of 2019-20.

Those expectations hung over the corn futures market, overshadowing bullish weekly export data. USDA reported export inspections of U.S. corn in the latest week at 1,334,686 tonnes, topping a range of trade expectations.

— Reporting for Reuters by Julie Ingwersen; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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